A nation of takers

The American republic has endured for well over two centuries, but over the past 50 years, the apparatus of American governance has undergone a radical transformation. In some basic respects – its scale, its preoccupations, even many of its purposes – the U.S. government today would be scarcely recognizable to Franklin D. Roosevelt, much less to Abraham Lincoln or Thomas Jefferson.

What is monumentally new about the American state today is the vast empire of entitlement payments that it protects, manages and finances. Within living memory, the federal government has become an entitlements machine. As a day-to-day operation, it devotes more attention and resources to the public transfer of money, goods and services to individual citizens than to any other objective, spending more than for all other ends combined.

The growth of entitlement payments over the past half-century has been breathtaking. In 1960, U.S. government transfers to individuals totaled about $24 billion in current dollars, according to the Bureau of Economic Analysis. By 2010 that total was almost 100 times as large. Even after adjusting for inflation and population growth, entitlement transfers to individuals have grown 727 percent over the past half-century, rising at an average rate of about 4 percent a year.

In 2010 alone, government at all levels oversaw a transfer of over $2.2 trillion in money, goods and services. The burden of these entitlements came to slightly more than $7,200 for every person in America. Scaled against a notional family of four, the average entitlements burden for that year alone approached $29,000.

A half-century of unfettered expansion of entitlement outlays has completely inverted the priorities, structure and functions of federal administration as these were understood by all previous generations. Until 1960 the accepted task of the federal government, in keeping with its constitutional charge, was governing. The overwhelming share of federal expenditures was allocated to some limited public services and infrastructure investments and to defending the republic against enemies foreign and domestic. In 1960, entitlement payments accounted for well under a third of the federal government's total outlays – about the same fraction as in 1940, when the Great Depression was still shaping American life. But over subsequent decades, entitlements as a percentage of total federal spending soared. By 2010 they accounted for just about two-thirds of all federal spending, with all other responsibilities of the federal government making up barely one-third. In a very real sense, entitlements have turned American governance upside-down.

From the founding of our nation until quite recently, the U.S. and its citizens were regarded, at home and abroad, as exceptional in a number of deep and important respects. One of these was their fierce and principled independence, which informed not only the design of the political experiment that is the U.S. Constitution but also their approach to everyday affairs.

The proud self-reliance that struck Alexis de Tocqueville in his visit to the U.S. in the early 1830s extended to personal finances. The American “individualism” about which he wrote did not exclude social cooperation – the young nation was a hotbed of civic associations and voluntary organizations. But in an environment bursting with opportunity, American men and women viewed themselves as accountable for their own situation through their own achievements – a novel outlook at that time, markedly different from the prevailing attitudes of the Old World (or at least the continent).

The corollaries of this American ethos were, on the one hand, an affinity for personal enterprise and industry and, on the other, a horror of dependency and contempt for anything that smacked of a mendicant mentality. Although many Americans in earlier times were poor, even people in fairly desperate circumstances were known to refuse help or handouts as an affront to their dignity and independence. People who subsisted on public resources were known as “paupers,” and provision for them was a local undertaking. Neither beneficiaries nor recipients held the condition of pauperism in high regard.

Overcoming America's historic cultural resistance to government entitlements has been a long and formidable endeavor. But as we know today, this resistance did not ultimately prove an insurmountable obstacle to establishing mass public entitlements and normalizing the entitlement lifestyle. The U.S. is now on the verge of a symbolic threshold: the point at which more than half of all American households receive and accept transfer benefits from the government.

As Americans opt to reward themselves ever more lavishly with entitlement benefits, the question of how to pay for these government transfers inescapably comes to the fore. The taker mentality has thus ineluctably gravitated toward taking from a pool of citizens who can offer no resistance to such schemes: the unborn descendants of today's entitlement-seeking population.

The prospect of careening along an unsustainable economic road is deeply disturbing. But another possibility is even more frightening – namely, that the present course may in fact be sustainable for far longer than most people today might imagine.

The U.S. is a very wealthy society. If it so chooses, it has vast resources to squander. And internationally, the dollar is still the world's reserve currency; there remains great scope for financial abuse of that privilege.

Such devices might well postpone the day of fiscal judgment: not so the day of reckoning for American character, which may be sacrificed long before the credibility of the U.S. economy. Some would argue that it is an asset already wasting away before our very eyes.

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